Monday, August 1, 2011

Shaw Wallace looks for investors to develop properties

By Jithendra Antonio

As apartments, shopping malls and hotels in Colombo are indicating good future prospects, Show Wallace & Hedges PLC is in search of investors to develop company-owned land assets.

“We have been considering various options, and have indicated to prospective investors that we are flexible in our approach to secure the development of our valuable land,” Chairman S.R. Vamadevan says in his review.

Vamadevan further stresses that with the boom in tourism, there is some interest shown by several prospective investors, to develop a city hotel in the Kollupitiya property, and the company is exploring the possibility.

Shaw Wallace & Hedges PLC (SHAW) has a property at No.s 353, Kollupitiya Road and 420 & 422 R.A. de Mel Mawatha, Colombo 3 which are currently given on rent to Related Companies for Rs.2.5 million.

Vamadevan has expressed confidence that the company would be able to finalize an investment and continue with the MayfairCity project, after redesigning the project to suit investor requirements.

 “In relation to other land, the Company is continuing its efforts to identify a suitable collaborator for a mega project, and this would depend on the investor confidence on future economic performance of the country.”
 In his review Vamadevan outlines that  developments issues in respect of the MayfairCity Stage 1 construction work, which was interrupted with effect from 20th October 2007, still remains the same.

“The Company may have to change its plan in respect of the project in progress, since the economic factors have changed since the initial design of the project” he notes adding that negotiations took place with several interested parties throughout the year, but none of them reached a stage of fruition.

According to him, within the last six months, firm negotiations have been held with two international parties, but a deal has yet to be finalized with either party.

“In addition, the investment required for the MayfairCity Stage 1 is substantially high” he says adding  that the company is hopeful it will succeed in its efforts at least by end of 2011. As per financials, the company has mortgaged land to the extent of 264.65 perches to banks, to obtain Rs.511 million for the MayfairCity Stage 1 project.

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